There seem to be a couple problems with this quest. After I kill Dagoth Gares, I go cure myself of Corprus disease. Now, when I sleep in a bed, I get woken up after 2-4 hours with a notification that "something approaches as you sleep..." In Morrowind, I would be attacked by an Ash Ghoul, but in Morroblivion, there is never any creature there. Also, in Morrowind this would happen once every few nights; but in Morroblivion it happens every few hours, ie 3 or 4 times a night. That is problem 1 - extremely annoying.
Per UESP (http://www.uesp.net/wiki/Morrowind:Sleepers_Awake), if you kill four acolytes of Dagoth Ur, the night attacks should stop. So I cleared out Subdun, Hassour, and Assemanu. I went to Ald'Ruhn to find Hanarai Assutlanipal, the 4th Acolyte... but she wasn't in here house. I waited 1 hour, 24 times, to catch here coming home, but she never appeared. I couldn't find her anywhere in Ald'Ruhn. That's problem 2.
I don't know what Hanarai's reference ID is, so I can't make her appear with the console to kill here. Not that I think it would make a difference. As the only one left, in Morrowind the attacks would only happen in Ald'Ruhn. But they still happen every time I sleep in a bed, in Balmora, in Seyda Neen, even in Cyrodiil. That's problem 3.
Finally, I entered "SQT" in the console to find the Sleepers Awake quest. Referring to the quest stages in UESP, I entered "SetStage fbmwA1SleepersAwake 50" I got the notification that "With Dagoth Ur dead, no one else's sleep will be troubled" or whatever, and the quest moved from my active quest to my finished quests. But, I still get woken up 3-4 times a night with the "something approaches" message.
Note: there was bug report about this a while ago linking it to the Dark Brotherhood/Tribunal quest.
http://morroblivion.com/dark-brotherhood-something-approaches-as-you-sleep
Apparently when they figured out it wasn't related to the Dark Brotherhood the issue was marked closed, but they never addressed the problem of it happening too often (3-4 times a night!), and for too long (after the quest is marked finished!), and in the wrong places (ash ghouls in Cyrodiil?!)

#1
I have made some alterations to sleepers quest script.
Please try the attached esp, and tell if it works.
Attachments